With an annual inflation rate now projected to be 10,00,000 %, Venezuela is experiencing extreme ‘hyperinflation’. India, in comparison, has an annual inflation rate (CPI) of just 4.87%, which means prices double every 14.6 years. Here's more:

It is clear that high inflation rates disrupt a country’s economic stability. Caused by a surplus of money or a sudden increase in the production cost of goods and services, high inflation can be detrimental to a country’s well-being. Fixed or lower-income families face a regressive effect wherein they are priced out of necessities such as food, water, etc. Real incomes decline as fewer goods and services can be purchased for the same amount of amount.

Meanwhile, higher income individuals lose value in savings. The cost of borrowing also increases and lenders run the risk of encountering bad debt. Creditors who do not account for inflation hike in their calculation of loan interest face adversity as well. Depending on the nature of the country, whether it is an import-heavy or an export-heavy country, the country’s trade account can face disruptive changes as well.

If inflation rises faster than income or wages then people’s cost of living will diminish. The loss in purchasing power in the short term (much like the lower and fixed income persons), will also derail a country’s constituents.

Thus, knowing and understanding the list of the countries with the highest inflation rates is getting an insight into some dysfunctional economies.

5. Malawi (19.78%)

Malawi’s double-digit inflation is caused by a misguided government that is racking up external borrowing while introducing unfair taxes to repay back their loans. The government has even removed zero rating on basic commodities and made amendments to the Value-Added Tax (VAT) Act to collect more funds from disgruntled consumers.

4. Angola (33.68%)

The country is Africa’s largest oil producer and Luanda, its capital, regularly ranks high on the list of the world’s most expensive cities. However, its over-reliance on oil, poor political stability, and the huge rich and poor divide is causing many problems for the country. It is also speculated that the country might struggle to make its upcoming debt repayments if oil prices remain low.

3. Suriname (67.11%)

Protestors took to the streets in Paramaribo, the country’s capital last year to denounce the unforeseen electricity and water price hikes. The country is in this problem because of falling commodity prices of gold and oil. The country’s sole bauxite mine and alumina plants also shut down last year. The Central Bank tried to rein in the country’s troubles through austerity measures such as a tighter monetary policy but it did not help alleviate the pressure.

2. South Sudan (476.02%)

Economists estimate that the country will continue to experience three-digit inflation well into 2017 as well because of its poor infrastructure, reduced production of crude oil (because of low oil prices), and its chaotic political environment.

1. Venezuela (475.61%)

Although Venezuela might not have the highest inflation rate per se in actual figures, it deserves the top spot on this list because it is the most dysfunctional economy in the world right now. Venezuela is embroiled in a whole host of problems. It is currently tackling food and medicine shortages, power outages, and an invasive government.

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